So much for pay to play. That’s what I’ve been calling the controversial strategy some employers considered as the Oct. 1 date for open enrollment creeps closer.
Mid-sized employers have few options before the mandate penalty returns a year or so from now: Cut workers, cut hours or offer benefits.
The fourth option—handing employees a check to go buy their own coverage out on the exchanges—is now history.
Labor issued one of their byzantine technical releases in mid-September banning the use of the more popular consumer-driven products as financing vehicles for individual coverage. In short, employers can’t fund an HSA, for example, so the employee can take that money to the exchange and buy an individual policy.
I think it’s fair. I’m sure employers will cry and gnash their teeth, but paying employees to go play on their own seemed the worst of both worlds. Besides, I’d hardly think the tax benefits (not too mention the free cash) would compare to the subsidies they’d surrender in the bargain.
While I’m sure there are throngs of employees who would take the money, thinking something’s better than nothing, I’ve no doubt many would find themselves without a clue in the exchange market and out of money before the year was half over.
And I think this benefits brokers (no pun intended). Employers on this particular fence will probably lean back toward offering coverage. And how many more surveys do we need to see before we all admit most employees have no idea what they’re doing when it comes to buying—or managing— health insurance? They’re a reason we say CDHC stands for “consumers don’t have a clue” only half-jokingly. And don’t think reform’s made it any easier.
Employers need brokers to offer the best bang for their buck. And employees need brokers to help them navigate some pretty murky waters.
And make no mistake, there’s still a bright future ahead for consumer-driven health care, but this isn’t it.